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on Labour Economics |
| By: | Gehrke, Britta (University of Erlangen-Nuremberg); Lechthaler, Wolfgang (Kiel Institute for the World Economy); Merkl, Christian (University of Erlangen-Nuremberg) |
| Abstract: | This paper analyzes Germany's unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for post-unification Germany. This allows us to disentangle the role of institutions (short-time work, government spending rules) and shocks (aggregate, labor market, and policy shocks) and to perform counterfactual exercises. We identify positive labor market performance shocks (likely caused by labor market reforms) as the key driver for the "German labor market miracle" during the Great Recession. |
| Keywords: | Great Recession, search and matching, DSGE, short-time work, fiscal policy, business cycles, Germany |
| JEL: | E24 E32 E62 J08 J63 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11858&r=lab |
| By: | Kim, Kyeongkuk (University of Hawaii at Manoa); Lee, Sang-Hyop (University of Hawaii at Manoa); Halliday, Timothy J. (University of Hawaii at Manoa) |
| Abstract: | We consider the nexus of intra-household transfers, the sex composition of the sibship, and parental retirement behavior in Korea. We provide evidence that the cost of raising sons is higher than it is for daughters in Korea. Thus, in the absence of sufficient transfers from adult sons to parents, parents will fund their earlier investments in their sons by increasing their labor supply. Consistent with this, we show that parents with more adult sons delay their retirement. In particular, an elderly parent with all sons has a retirement probability that is 7–10 percentage points lower than a comparable parent with all daughters. Elderly parents also work between 1.8 and 2.7 hours more per week when their sibship consists of all sons. These effects are the most pronounced when the first born is a son, as well as for poorer households. |
| Keywords: | retirement, intra-household transfers, gender, sex ratios |
| JEL: | J1 J13 J16 J26 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11846&r=lab |
| By: | Caucutt, Elizabeth; Guner, Nezih; Rauh, Christopher |
| Abstract: | The black-white differences in marriages in the US are striking. While 83% of white women between ages 25 and 54 were ever married in 2006, only 56% of black women were: a gap of 27 percentage points. Wilson (1987) suggests that the lack of marriageable black men due to incarceration and unemployment is responsible for low marriage rates among the black population. In this paper, we take a dynamic look at the Wilson Hypothesis. We argue that the current incarceration policies and labor market prospects make black men riskier spouses than white men. They are not only more likely to be, but also to become, unemployed or incarcerated than their white counterparts. We develop an equilibrium search model of marriage, divorce and labor supply that takes into account the transitions between employment, unemployment and prison for individuals by race, education, and gender. We estimate model parameters to be consistent with key statistics of the US economy. We then investigate how much of the racial divide in marriage is due to differences in the riskiness of potential spouses. We find that differences in incarceration and employment dynamics between black and white men can account for half of the existing black-white marriage gap in the data |
| Keywords: | incarceration; inequality; Marriage; race; unemployment |
| JEL: | J12 J21 J64 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13275&r=lab |
| By: | Nikolka, Till |
| Abstract: | This paper investigates the role of family ties for international return migration decisions. The presence of children in the household affects return propensities of couples in different ways. Results suggest that schooling considerations as well as factors related to cultural identity play a role for family return migration. Moreover, the paper studies self-selection into return migration with respect to the partners’ incomes. Couples returning from Denmark to the non-Nordic countries are positively selected with respect to primary earner income. Positive selection holds for male and female primary earners; it is weaker among dual earner couples and among couples with children. |
| Keywords: | International migration,Family migration,Return migration,Education |
| JEL: | F22 J13 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181641&r=lab |
| By: | Jäger, Simon; Schoefer, Benjamin; Young, Samuel; Zweimüller, Josef |
| Abstract: | Nonemployment is often posited as a worker's outside option in wage setting models such as bargaining and wage posting. The value of this state is therefore a fundamental determinant of wages and, in turn, labor supply and job creation. We measure the effect of changes in the value of nonemployment on wages in existing jobs and among job switchers. Our quasi-experimental variation in nonemployment values arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit levels: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than 0.03. In contrast, a calibrated Nash bargaining model predicts a sensitivity of 0.39 - more than ten times larger. The empirical insensitivity holds even among workers with a priori low bargaining power, with low labor force attachment, with high predicted unemployment duration, among job switchers and recently unemployed workers, in areas of high unemployment, in firms with flexible pay policies, and when considering firm-level bargaining. The insensitivity of wages to the nonemployment value we document presents a puzzle to widely used wage setting protocols, and implies that nonemployment may not constitute workers' relevant threat point. Our evidence supports wage-setting mechanisms that insulate wages from the value of nonemployment. |
| Keywords: | Bargaining; nonemployment; Unemployment Benefits; wages |
| JEL: | J31 J60 J65 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13293&r=lab |
| By: | Sadka, Joyce; Seira, Enrique; Woodruff, Christopher |
| Abstract: | While observers agree that courts function poorly in developing countries, a lack of data has limited our understanding of the causes of malfunction. We combine data from admin- istrative records on severance cases filed in the Mexico City Labor Court with interventions that provide information to parties in randomly selected cases on predicted case outcomes and conciliation services. We first use the data to document a set of stylized facts about the func- tioning of the court. The interventions nearly double the overall settlement rate, but only when the plaintiff herself is present to receive the information directly. Administrative records from six months after the treatment indicate that the treatment effects remain unchanged over that period, even though an additional one in three cases in the control group settle in that period. The post-treatment results indicate that lawyers do not convey the information provided in the intervention to their clients. A simple analytic framework rationalizes the experimental results. Analysis of settlements induced by the interventions suggests that the provision of information is welfare-improving for the plaintiffs. The experimental results replicate over two phases conducted in different sub-courts, showing robustness. |
| Keywords: | firingdisputes; laborcourts; overconfidence; Settlement; statisticalinformation |
| JEL: | J52 J83 K31 K41 K42 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13261&r=lab |
| By: | Campo, Francesco (University of Milan Bicocca); Forte, Giuseppe (King's College London); Portes, Jonathan (King's College London) |
| Abstract: | We investigate the relationship between migration and productivity in the UK, using an instrumental variable along the lines suggested by Bianchi, Buonanno and Pinotti (2012). Our results suggest that immigration has a positive and significant impact (in both the statistical sense and more broadly) on productivity, as measured at a geographical level; this appears to be driven by higher-skilled workers. The results for training are less clear, but suggest that higher-skilled immigration may have a positive impact on the training of native workers. We discuss the implications for post-Brexit immigration policy. |
| Keywords: | immigration, productivity, training, Great Britain |
| JEL: | E24 J24 J61 M53 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11833&r=lab |
| By: | Merkl, Christian; van Rens, Thijs |
| Abstract: | Firms select not only how many, but also which workers to hire. Yet, in most labor market models all workers have the same probability of being hired. We argue that selective hiring crucially affects welfare analysis. We set up a model that is isomorphic to a search model under random hiring but allows for selective hiring. With selective hiring, the positive predictions of the model change very little, but implications for welfare are different for two reasons. First, a hiring externality occurs with random but not with selective hiring. Second, the welfare costs of unemployment are much larger with selective hiring, because unemployment risk is distributed unequally across workers. |
| Keywords: | labor market models; optimal unemployment insurance; welfare |
| JEL: | E24 J65 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13272&r=lab |
| By: | Richard C. Sutch |
| Abstract: | This working paper explores the significant contributions to the history of African-American slavery made by the application of the tools of cliometrics. As used here “cliometrics” is defined as a method of scientific analysis marked by the explicit use of economic theory and quantitative methods. American slavery of the late antebellum period [1840-1860] was one of the earliest topics that cliometricians focused on and, arguably, the topic upon which they made the largest impact. |
| JEL: | J0 J43 J61 J81 N11 N21 N31 N51 N92 P10 Q12 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25197&r=lab |
| By: | Alvaro Remesal (CUNEF) |
| Abstract: | I estimate a dynamic agency model to quantify the importance of dismissals in CEO incentives vis-à-vis pecuniary compensation. The model features endogenous dynamics in deferred and ow compensation, as well as exogenous departures, and endogenous dismissals after poor firm performance. Thus, the model functions as a classification device for CEO turnover events that exploits information from all the departures in the data. I estimate the model via the Simulated Method of Moments, using data for CEOs in U.S. public firms appointed from 1993 to 2013. The estimated CEO dismissal rate is 1.2 percent, and the CEO replacement cost represents 3.4 percent of firm assets, 64 million in 2015 U.S. dollars for the median firm. Poor governance, proxied by director independence, increases the replacement costs in big firms. The relationship reverses in small firms, so board independence must also capture better hiring policies or career concerns of directors. The results confirm that CEO dismissals are infrequent. However, changes in the cost of replacements that generate small increases in the underlying dismissal rate lead to substantial reductions in the size of incentive compensation. |
| Keywords: | Executives, CEO turnover, CEO compensation, governance, dismissal, SMM. |
| JEL: | G34 J33 J63 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2018_1809&r=lab |
| By: | Michael Barry (Griffith University); Alex Bryson (University College London, National Institute of Social and Economic Research and Institute for the Study of Labor); Rafael Gomez (University of Toronto); Bruce Kaufman (Georgia State University and Griffith Business School); Guenther Lomas (University of Toronto); Adrian Wilkinson (Griffith Business School) |
| Abstract: | Using new, rich data on a representative sample of British workers, we examine the relationship between joint consultation systems at the workplace and employee satisfaction, accounting for possible interactions with union and management-led high-commitment strategies. We focus on non-union employee representation at the workplace, in the form of joint consultative committees (JCCs), and the potential moderating effects of union representation and high-involvement human resource (HIHR) practices. Our findings suggest a re-evaluation of the role that JCCs play in the subjective well-being of workers even after controlling for unions and HIHR policies. There is no evidence in our estimates of negative interaction effects (i.e., that unions or HIHR negatively influence the functioning of JCCs with respect to employee satisfaction) or full mediation (i.e., that unions or HIHR are substitutes for JCCs when it comes to improving self-reported worker well-being). If anything, there is a significant and positive three-way moderating effect when JCCs are interacted with union representation and high-involvement management. This is the first time -- to the authors' knowledge -- that comprehensive measures of subjective employee well-being have been estimated with respect to the presence of a JCC at the workplace, whilst controlling for workplace institutions that are themselves designed to involve and communicate with workers. |
| Keywords: | worker representation; unions; joint consultative committees; HRM; job satisfaction |
| JEL: | J53 J58 J83 |
| Date: | 2018–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1808&r=lab |
| By: | Stéphane Auray (CREST; ENSAI ; ULCO); David L. Fuller (University of Wisconsin-Oshkosh); Damba Lkhagvasuren (Concordia University; CIREQ) |
| Abstract: | From 1989-2012; on average 23% of those eligible for unemployment insurance (UI) benefits in the US did not collect them. In a search model with matching frictions; private information associated with the UI non-collectors implies the market equilibrium is not Pareto optimal. The cause of the Pareto inefeciency is characterized along with the key features of collector vs. non-collector outcomes. Non-collectors transition to employment at a faster rate and a lower wage relative to the Pareto optimal arrival rates and wages. Quantitatively; this implies 1:71% welfare loss in consumption equivalent terms for the average worker; with a 3:85% loss conditional on non-collection. With an endogenous take-up rate; the unemployment rate and average duration of unemployment respond significantly slower to changes in the UI benefit level; relative to the standard model with a 100% take-up rate. |
| Keywords: | Unemployment insurance, take-up, calibration, matching frictions, search. |
| JEL: | E61 J32 J64 J65 |
| Date: | 2018–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2018-14&r=lab |
| By: | Brück, Tilman (ISDC - International Security and Development Center); Dunker, Kai M. (ISDC - International Security and Development Center); Ferguson, Neil T.N. (ISDC - International Security and Development Center); Meysonnat, Aline (UNU-MERIT); Nillesen, Eleonora (UNU-MERIT) |
| Abstract: | Violent conflict is a well-recognised driver of forced migration but literature does not usually consider the pull factors that might also cause irregular movements. In turn, the decision to leave and of where to go are rarely considered separately. This is in contrast to literature on regular international migration, which considers both push and pull factors. We contribute to these literatures by studying bilateral forced migration from multiple countries of origin to 28 European countries in the years either side of two "migration crises" – the wars in the Balkans and the Arab Spring. We pay attention to dynamics by analysing lagged flows and stocks of forced migrants and modelling their spatial distribution. We find that these partial adjustment and network effects are key pull factors, with employment rate in the destination country the only significant economic variable. In addition, we demonstrate that it is episodes of escalating conflict, rather than accumulated violence, that drives decisions to leave. Out-of-sample predictions indicate that if conflict in origin countries were to cease, forced migration would continue, albeit at a significantly reduced rate. Our findings suggest that past patterns of forced migration help shape future flows, that forced migration flows cannot easily be stopped by destination country policies, and that preventing conflict escalation is important for preventing forced migration. |
| Keywords: | forced migration, refugees, displacement, conflict, Arab Spring, MENA, Balkans, dynamic panel data, gravity model |
| JEL: | J61 J68 F22 O15 F51 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11834&r=lab |
| By: | Stewart-Evans, Michael (UNU-MERIT, Maastricht University); Siegel, Melissa (UNU-MERIT, Maastricht University) |
| Abstract: | The purpose of this paper is to understand the impact of women's migration on the lives of the men left-behind. Based on a qualitative research methodology the study consists of twenty interviews conducted with men across three different areas in Nicaragua. These interviews were used to understand changes to household decision making and how the man perceives his own sense of masculinity. The results suggest that in contrast to previous studies which have shown a reluctance of men to partake in work traditionally associated with women, the men in this study did not avoid partaking in domestic work or childcare. It was also found that none of the men - even those in receipt of remittances - stopped working and instead placed even greater symbolic importance on their work, allowing them to maintain their identity as the main breadwinner in the house. The study proposes that more work needs to be done to better understand the challenges and changes faced by men (an understudied group of the left-behind) as the number of women migrating for work continues to rise. |
| Keywords: | Migration, Gender, Left-behind, Masculinity, Machismo, Nicaragua |
| JEL: | O15 F22 J13 J16 |
| Date: | 2018–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2018034&r=lab |
| By: | Blanco, German (Illinois State University); Chen, Xuan (Renmin University of China); Flores, Carlos A. (California Polytechnic State University); Flores-Lagunes, Alfonso (Syracuse University) |
| Abstract: | We consider the problem of assessing the effects of a treatment on duration outcomes using data from a randomized evaluation with noncompliance. For such settings, we derive nonparametric sharp bounds for average and quantile treatment effects addressing three pervasive problems simultaneously: self-selection into the spell of interest, endogenous censoring of the duration outcome, and noncompliance with the assigned treatment. Ignoring any of these issues could yield biased estimates of the effects. Notably, the proposed bounds do not impose the independent censoring assumption - which is commonly used to address censoring but is likely to fail in important settings - or exclusion restrictions to address endogeneity of censoring and selection. Instead, they employ monotonicity and stochastic dominance assumptions. To illustrate the use of these bounds we assess the effects of the Job Corps (JC) training program on its participants' last complete employment spell duration. Our estimated bounds suggest that JC participation may increase the average duration of the last complete employment spell before week 208 after randomization by at least 5.6 log points (5.8 percent) for individuals who comply with their treatment assignment and experience a complete employment spell whether or not they enrolled in JC. The estimated quantile treatment effects suggest the impacts may be heterogeneous, and strengthen our conclusions based on the estimated average effects. |
| Keywords: | duration outcomes, partial identification, principal stratification, independent censoring, job corps |
| JEL: | C21 C24 C41 J64 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11864&r=lab |
| By: | Raj Chetty; John N. Friedman; Nathaniel Hendren; Maggie R. Jones; Sonya R. Porter |
| Abstract: | We construct a publicly available atlas of children's outcomes in adulthood by Census tract using anonymized longitudinal data covering nearly the entire U.S. population. For each tract, we estimate children's earnings distributions, incarceration rates, and other outcomes in adulthood by parental income, race, and gender. These estimates allow us to trace the roots of outcomes such as poverty and incarceration back to the neighborhoods in which children grew up. We find that children's outcomes vary sharply across nearby areas: for children of parents at the 25th percentile of the income distribution, the standard deviation of mean household income at age 35 is $5,000 across tracts within counties. We illustrate how these tract-level data can provide insight into how neighborhoods shape the development of human capital and support local economic policy using two applications. First, the estimates permit precise targeting of policies to improve economic opportunity by uncovering specific neighborhoods where certain subgroups of children grow up to have poor outcomes. Neighborhoods matter at a very granular level: conditional on characteristics such as poverty rates in a child's own Census tract, characteristics of tracts that are one mile away have little predictive power for a child's outcomes. Our historical estimates are informative predictors of outcomes even for children growing up today because neighborhood conditions are relatively stable over time. Second, we show that the observational estimates are highly predictive of neighborhoods' causal effects, based on a comparison to data from the Moving to Opportunity experiment and a quasi-experimental research design analyzing movers' outcomes. We then identify high-opportunity neighborhoods that are affordable to low- income families, providing an input into the design of affordable housing policies. Our measures of children's long-term outcomes are only weakly correlated with traditional proxies for local economic success such as rates of job growth, showing that the conditions that create greater upward mobility are not necessarily the same as those that lead to productive labor markets. |
| JEL: | H0 J0 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25147&r=lab |